Spendthrift and Asset Protection Trusts in Nevada

Part of my Nevada Trusts Guide.

By Ronald W. Brilliant, Attorney at Law · Licensed in Idaho, Nevada & California · Last reviewed: September 2026 against Nevada Revised Statutes chapters 153, 162B and 163 through 166A (current through the 2025 legislative session)

In This GuideNevada TrustsTopic 6 of 10: Spendthrift Trusts

A spendthrift trust is a trust whose terms place a valid restraint on both voluntary and involuntary transfers of a beneficiary’s interest (NRS 166.020). In plain terms, the beneficiary generally cannot sell or give away the interest, and the beneficiary’s creditors generally cannot seize it (NRS 166.120). Nevada’s rules for these trusts are in NRS Chapter 166, which may be called the Spendthrift Trust Act of Nevada (NRS 166.010).

This topic matters to people who want to leave property to someone while protecting it from that person’s creditors. It also matters to people who want to create a trust for their own benefit, often described as a self-settled or asset protection trust, and to creditors who want to challenge a transfer into such a trust. Nevada allows a settlor (the person who creates or adds property to the trust) to be a beneficiary only if strict conditions are met (NRS 166.040(1)(b)).

Which Trusts Chapter 166 Covers

Unless the trust document expressly says otherwise, Chapter 166 governs the construction, operation and enforcement in Nevada of spendthrift trusts created in or outside Nevada if any of these is true: all or part of the land or personal property affected (or its rents, profits, interest or dividends) is in Nevada; the declared domicile of the creator of a trust affecting personal property is in Nevada; or a trustee qualified under NRS 166.015(2) has powers that include maintaining records and preparing income tax returns for the trust, and all or part of the trust’s administration is performed in Nevada (NRS 166.015(1)).

For Chapter 166, “settlor” means the person who creates a spendthrift trust, however described in the trust document. It also means any person who contributes assets to the trust, as to the assets that person contributed, except to the extent that person received consideration for them (NRS 166.018).

How a Spendthrift Trust Is Created

Any person competent by law to execute a will or deed may create a spendthrift trust in real, personal or mixed property. It must be done by writing only, duly executed, by will, conveyance or other writing (NRS 166.040(1)). A “writing” includes an electronic will and an electronic trust (NRS 166.025).

No special wording is required. It is enough if the terms of the writing show that the creator intended to create a spendthrift trust (NRS 166.050). The general rules for forming a valid trust are covered on the creating a trust page.

The beneficiaries must be named or clearly referred to in the writing. A spouse, former spouse, child or dependent is not a beneficiary unless named or clearly referred to as a beneficiary in the writing (NRS 166.080).

Who Can Be a Beneficiary

A spendthrift trust may be created for the benefit of (NRS 166.040(1)):

A person other than the settlor (NRS 166.040(1)(a));
The settlor, “if the writing is irrevocable, does not require that any part of the income or principal of the trust be distributed to the settlor, and was not intended to hinder, delay or defraud known creditors” (NRS 166.040(1)(b)); or
Both the settlor and another person, if the writing meets those same requirements (NRS 166.040(1)(c)).

Self-Settled Spendthrift Trusts: Requirements

When the settlor is also a beneficiary, all three conditions quoted above must be met. The writing must be irrevocable, must not require any distribution of income or principal to the settlor, and must not have been intended to hinder, delay or defraud known creditors (NRS 166.040(1)(b)).

If the settlor is a beneficiary, at least one trustee must be (NRS 166.015(2)):

A natural person who resides and has his or her domicile in Nevada (NRS 166.015(2)(a));
A trust company organized under federal law or the laws of Nevada or another state that maintains an office in Nevada for the transaction of business (NRS 166.015(2)(b)); or
A bank organized under federal law or the laws of Nevada or another state that maintains an office in Nevada for the transaction of business and possesses and exercises trust powers (NRS 166.015(2)(c)).

For this rule, a “trust company” does not include a foreign independent trust company authorized only to solicit trust company business in Nevada under NRS 669.205 (NRS 166.015(3)).

Rights the Settlor May Keep

A writing still meets the self-settled requirements even if, under its terms (NRS 166.040(2)):

The settlor may prevent a distribution from the trust (NRS 166.040(2)(a)).
The settlor holds a special lifetime or testamentary power of appointment that cannot be exercised in favor of the settlor, the settlor’s estate, a creditor of the settlor or a creditor of the settlor’s estate (NRS 166.040(2)(b)).
The settlor is a beneficiary of a charitable remainder trust under 26 U.S.C. § 664; may receive a yearly percentage of the trust’s value not exceeding the amount that may be defined as income under 26 U.S.C. § 643(b) (or, for qualified retirement plan or eligible deferred compensation plan benefits, the minimum required distribution under 26 U.S.C. § 4974(b)); may receive income or principal from a qualifying grantor retained annuity trust or unitrust; or may use real property held in a qualified personal residence trust, each as described in the statute (NRS 166.040(2)(c)-(f)).
The settlor may receive income or principal from the trust, but only subject to the discretion of another person (NRS 166.040(2)(g)).
The settlor may use real or personal property owned by the trust (NRS 166.040(2)(h)).

NRS 166.040 is not to be read as prohibiting the settlor from holding other powers under the trust, whether or not the settlor is a cotrustee. Examples include the power to remove and replace a trustee, direct trust investments and exercise other management powers (NRS 166.040(3)). That allowance does not cover a power of the settlor to make distributions to himself or herself without the consent of another person (NRS 166.040(3)).

The settlor has only the powers and rights the trust document gives. Any agreement or understanding between the settlor and the trustee, express or implied, that tries to give the settlor more rights or authority than the trust document states is void (NRS 166.045).

How the Protection Works

A spendthrift trust generally prohibits the assignment, alienation, acceleration and anticipation of a beneficiary’s interest, whether by the beneficiary’s voluntary or involuntary act, by operation of law or by any process (NRS 166.120(1)). The beneficiary has no power to dispose of any of the income by his or her order (NRS 166.120(3)).

The beneficiary’s interest is not subject to attachment or to being taken in execution under legal process against the beneficiary, the trustee or the trust estate (NRS 166.120(3)). The trustee’s payments, mandatory or discretionary, must be made only to or for the benefit of the beneficiary, not to an assignee or on any order of the beneficiary, including orders made through judgment, execution, attachment, garnishment, bankruptcy or otherwise (NRS 166.120(2)).

The trustee is required to disregard and defeat every assignment or other act attempted contrary to Chapter 166 (NRS 166.120(4)). Any action to enforce the beneficiary’s rights, to decide whether those rights are subject to execution, to levy an attachment or for any other remedy must be brought only in a proceeding under Chapter 153 (testamentary trusts) or NRS 164.010 (nontestamentary trusts), and the court has exclusive jurisdiction (NRS 166.120(2)). See the page on trust court petitions and disputes for more on those proceedings.

Default Rules for Reading the Trust

Unless the writing expressly says otherwise, the principles in NRS 166.080 to 166.150 govern every spendthrift trust created in Nevada as if written into it (NRS 166.070). A creator may make different provisions, but only by using express, specific language (NRS 166.160). The default principles include:

Support. Provision for the beneficiary is for the beneficiary’s support, education, maintenance and benefit alone, without reference to the beneficiary’s needs, station in life or mode of life, or the needs of any other person (NRS 166.090(1)). The trust does not depend on the beneficiary’s capacity or competency (NRS 166.090(2)).
Trustee discretion. Where the creator makes payments or amounts discretionary with the trustee, that discretion is absolute (NRS 166.110(1)). It may never be interfered with because of the beneficiary’s needs, station in life or mode of life, for uncertainty, or on any pretext (NRS 166.110(2)).
No legal estate in principal. A beneficiary has no legal estate in the trust principal unless the trust terms entitle the beneficiary (or someone deriving title from the beneficiary) to have it conveyed, immediately or after a term of years or a life, and in the meantime the income is not to be paid to that beneficiary or any other beneficiary (NRS 166.130).
Duration. A spendthrift trust may not last longer than allowed under NRS 111.103 to 111.1039 (NRS 166.140).

Time Limits for Creditors to Challenge a Transfer

NRS 166.170 sets deadlines for anyone who wants to bring an action about a transfer of property to a spendthrift trust. The deadline depends on whether the person was already a creditor when the transfer was made (NRS 166.170(1)). “Creditor” has the meaning given in NRS 112.150(4) (NRS 166.170(10)(b)).

Who is bringing the action	Action must be commenced within	NRS
A person who was a creditor when the transfer was made	2 years after the transfer, or 6 months after the person discovers or reasonably should have discovered the transfer, whichever is later	166.170(1)(a)
A person who became a creditor after the transfer was made	2 years after the transfer	166.170(1)(b)

A person is deemed to have discovered a transfer when a public record is made of it. Examples include a real property deed recorded with the county recorder where the property is located, or a financing statement filed under Chapters 104 to 104C (NRS 166.170(2)).

Notwithstanding any other law, if on the date an action is brought a creditor’s action about a transfer to the spendthrift trust would be barred under NRS 166.170, then no action of any kind, including an action to enforce a judgment, may be brought at law or in equity against the trustee of that trust (NRS 166.170(8)).

How Transfer Dates Are Counted

Multiple transfers. A later transfer is disregarded when deciding whether an action may be brought about an earlier transfer, and any distribution to a beneficiary is deemed made from the most recent transfer (NRS 166.170(7)).
Refinancing. If trust property is conveyed to the settlor or a beneficiary to get a loan secured by a mortgage or deed of trust and then reconveyed to the trust, that conveyance is disregarded and the reconveyance relates back to the original transfer date. The mortgage or deed of trust is enforceable against the trust (NRS 166.170(4)).
Appointing to a second trust. If a trustee appoints property of the original spendthrift trust to a second spendthrift trust under NRS 163.556, the transfer date is deemed to be the date the settlor transferred assets into the original trust (NRS 166.170(9)). That power is discussed on the modifying and ending trusts page.
Trusts moved to Nevada. If a trust’s domicile is moved to Nevada from a place with laws similar to Chapter 166, the transfer is deemed to have occurred on the date the settlor transferred assets into the trust if the trust’s law has always been substantially similar to Chapter 166, or otherwise on the earliest date the trust’s law was substantially similar (NRS 166.180(2)).

What a Creditor Must Prove

In addition, a creditor may not bring an action about a transfer to a spendthrift trust unless the creditor proves by clear and convincing evidence that (NRS 166.170(3)):

The transfer was a fraudulent transfer under Chapter 112; or
The transfer violates a legal obligation owed to the creditor under a contract or a valid court order that is legally enforceable by that creditor.

Without that proof, the transferred property is not subject to the creditor’s claims (NRS 166.170(3)). Proof by one creditor does not count as proof for any other creditor, and proof about one transfer does not invalidate any other transfer (NRS 166.170(3)).

A separate statute says that a creditor of a settlor may not seek to satisfy a claim from a trust’s assets because of the existence of a discretionary power given to someone other than the settlor (including a power to reimburse the settlor for tax on trust income or principal), a power letting the settlor reacquire trust property by substituting property of equivalent value, or a power letting the settlor borrow trust property without adequate interest or security (NRS 163.5559(1)). That rule does not stop a creditor of a spendthrift trust’s settlor from reaching property the settlor transferred, to the extent the creditor proves by clear and convincing evidence that the transfer was fraudulent as to that creditor under Chapter 112 or violates a legal obligation owed under an enforceable contract or valid court order (NRS 163.5559(2)). A trustee or interested person may petition the court when trust property is subject to a claim of a creditor of the settlor (NRS 164.033(1)(c)).

Claims Against Trustees and Advisers

A person other than a beneficiary or settlor may not bring a claim against a trustee of a spendthrift trust unless the person shows by clear and convincing evidence that the trustee acted in violation of Nevada law, knowingly and in bad faith, and that the trustee’s actions directly caused the person’s damages (NRS 166.170(6)). “Trustee” here includes a cotrustee and a predecessor trustee (NRS 166.170(6)).

The same clear and convincing standard applies to any claim against an adviser to the settlor or trustee (NRS 166.170(5)). An “adviser” is any person, such as an accountant, attorney or investment adviser, who gives advice about or was involved in creating, transferring property to or administering the trust, or who helped prepare its accountings, tax returns or other reports (NRS 166.170(10)(a)).

Moving a Trust to Nevada

A trust administered under the laws of another state or a foreign jurisdiction is a spendthrift trust under Chapter 166 if all of the following are met (NRS 166.180(1)):

The trustee complies with any requirements in the trust document and in the laws of the place the trust is being transferred from (NRS 166.180(1)(a)).
The trustee or other person with power to transfer the trust’s domicile declares that intent in writing (NRS 166.180(1)(b)).
If someone other than the trustee signs that writing, it is delivered to the trustee (NRS 166.180(1)(c)).
All requirements of Chapter 166 are satisfied at the same time as, or immediately after, the change of domicile (NRS 166.180(1)(d)).

How I Can Help

I help clients understand how Nevada’s spendthrift trust rules apply to their plans, including whether a trust meant to benefit the settlor meets the requirements of Chapter 166 and how the creditor time limits may affect a particular transfer. I also work with trustees and beneficiaries on questions about administering these trusts. Request a consultation to discuss your situation.

This page provides general information about Nevada trust law, based on the Nevada Revised Statutes as of the 2025 legislative session, and is not legal advice. Other Nevada laws, court rules, tax law, and case law also affect trusts. Every situation is different; consult an attorney about yours. Reading this page does not create an attorney-client relationship.